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Tuesday, November 13th, 2018

 

UPDATE 1-U.S. senators alarmed if China gets control of Djibouti port

(Adds Pentagon and State response)

By Patricia Zengerle

WASHINGTON, Nov 13 (Reuters) – Two prominent U.S. senators expressed alarm on Tuesday about the military and political consequences if China gains control of a port terminal in Djibouti, and said they were concerned it could further boost Beijing’s influence in East Africa.

In a letter to Secretary of State Mike Pompeo and Secretary of Defense Jim Mattis, Republican Senator Marco Rubio and Democratic Senator Chris Coons said they were concerned about Djibouti’s termination of a contract for the Doraleh Container Terminal with United Arab Emirates-based DP World in February and the nationalization of the port in September.

Reports that Djibouti, heavily indebted to Beijing, would likely cede the port’s operations to a Chinese state-owned enterprise were “even more alarming,” they said.

The letter was the latest in a series of efforts by members of Congress who want to counter China’s growing international influence, which they see as a threat to U.S. economic and security interests.

Trump has been focusing on the economic threat from China and has brought the two countries to the brink of a trade war, but many lawmakers want to ensure the administration also treats the country as a security threat.

A tiny nation strategically located at the entrance to the Red Sea on the route to the Suez Canal, Djibouti became home to China’s first overseas military base last year. A U.S. base located just miles away stages operations against Islamic State, al Qaeda and other militant groups.

Rubio and Coons sent Tuesday’s letter as lawmakers returned to the Capitol for the first time in several weeks after congressional elections on Nov. 6.

Asked for comment, a Pentagon spokesman said the Defense Department welcomed infrastructure and other investment that could benefit the region, but added “countries should be wary of piling on monumental debt.”

A State Department spokesman had no immediate response.

The Senate last month passed legislation overhauling the way the federal government lends money for foreign development, in a shift meant largely as a response to Chinese influence.

U.S. officials say they worry about what they call China’s “debt trap” diplomacy, in which countries end up giving up control of major assets such as ports or roadways when they fund infrastructure projects with Chinese loans that they cannot pay back.

Marine General Thomas Waldhauser, the top U.S. military officer for Africa, told a Congressional hearing earlier this year the U.S. military could face “significant” consequences if China took the port in Djibouti. (Reporting by Patricia Zengerle Editing by Sonya Hepinstall)


U.S. senators alarmed if China gets control of Djibouti port

WASHINGTON, Nov 13 (Reuters) – Two prominent U.S. senators expressed alarm on Tuesday about the military and political consequences if China gains control of a port terminal in Djibouti, and said they were concerned it could further boost Beijing’s influence in East Africa.

In a letter to Secretary of State Mike Pompeo and Secretary of Defense Jim Mattis, Republican Senator Marco Rubio and Democratic Senator Chris Coons said they were concerned about Djibouti’s termination of a contract for the Doraleh Container Terminal with United Arab Emirates-based DP World in February and the nationalization of the port in September.

Reports that Djibouti, heavily indebted to Beijing, would likely cede the port’s operations to a Chinese state-owned enterprise were “even more alarming,” they said.

The letter was the latest in a series of efforts by members of Congress who want to counter China’s growing international influence, which they see as a threat to U.S. economic and security interests.

Trump has been focusing on the economic threat from China and has brought the two countries to the brink of a trade war, but many in Congress want to ensure the administration also treats the country as a security threat.

A tiny nation strategically located at the southern entrance to the Red Sea on the route to the Suez Canal, Djibouti became home to China’s first overseas military base last year. A U.S. base located just miles away stages operations against Islamic State, al Qaeda and other militant groups.

Rubio and Coons sent Tuesday’s letter as lawmakers returned to the Capitol for the first time in several weeks after congressional elections on Nov. 6.

The Senate last month passed legislation overhauling the way the federal government lends money for foreign development, in a shift meant largely as a response to Chinese influence.

U.S. officials say they worry about what they call China’s “debt trap” diplomacy, in which countries end up giving up control of major assets such as ports or roadways when they fund infrastructure projects with Chinese loans that they cannot pay back.

Marine General Thomas Waldhauser, the top U.S. military officer for Africa, told a Congressional hearing earlier this year the U.S. military could face “significant” consequences if China took the port in Djibouti. (Reporting by Patricia Zengerle Editing by Sonya Hepinstall)


On maize, the biggest scandal was the role of major millers

By JAINDI KISERO
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On the maize scandal, we are still at the stage of allegations and indictments, rather than proof and convictions. I think that in the rush to judgment, we risk covering up for the real culprits while giving too much play to peripheral players in the scam.

Me thinks that the almost obsessive focus we have given to the issue of traders who we accuse of having delivered too much maize to the National Cereals and Produce Board (NCPB) at the expense of genuine farmers, has only served to deflect attention from the real perpetrators of the maize scandal.

Make no mistake. I am not saying that the traders who colluded with NCPB officials to fill warehouses by jumping queues and denying genuine farmers access to the most important marketing outlet should not be punished.

DETECTIVES

Action must be taken. But when I hear that detectives have pitched camp in Eldoret and Kisumu where cheap grain suspected to have been imported from Uganda was delivered and prompt payment made even as genuine farmers were kept on the waiting list for months on end, I get the distinct feeling that the investigators are putting the bigger spotlight on a peripheral side of the scandal.

The biggest maize scandal was the decision by Kilimo House to give contracts to politically influential millers to import maize on behalf of the government. The importers brought 11.9 million 90kg bags of maize into the country through Mombasa Port.

HYDERY P LTD

I see from records that the first ship docked on May 10, 2017 and the last on December 27, 2017. The big names in the game were entities such as Hydery P Ltd, Holbud, Mombasa Maize Millers, Pembe Flours and Kitui Flour and Export Trading Company Ltd.

Mark you, the imported maize belonged to the government. The NCPB only handled and sold it at prices determined and fixed by Kilimo House. If the detectives are truly serious about getting to the bottom of the maize scandal, their first port of call must be Kilimo House.

Who decided on the quantities of maize to be imported and the formula used to determine the price at which millers were buying imported maize from NCPB? Why was the maize not sold directly to consumers?

IMPORTED MAIZE

Consider the following: In the first stage, the millers imported the maize at an administratively set cost of Sh3,600 per bag, which after adding transport costs, came to a price of Sh4000 per bag.

In the second stage, the maize was sold to the very same millers and traders at a price of Sh2,300 per bag, a margin of Sh1, 700.

We must not forget that within the same period, the NCPB was buying maize from farmers for the 2017/2018 season at Sh3,200 per bag.

It was a perfect environment for arbitrage and corruption. Me thinks that if the detectives do a thorough job, they will find that some of the maize imported by the government ended up being smuggled back into NCPB stores.

PROCUREMENT

I have before advocated the dismantling of the NCPB and the introduction of a warehousing receipt system. But even before we get there, let us remove Kilimo House from procurement of maize and fertiliser.

Today, Kilimo House operates more or less like a broker, clinging on the responsibility of managing maize and fertiliser procurement and issuing letters of allocations to politically connected traders and millers just to allow them access them from NCPB on the cheap. The case of fertiliser is even more illustrative. Kilimo House is the one that invites tenders and contracts international fertiliser traders.

Kilimo House then assigns the fertiliser import contract to the NCPB to perform and process, including having to seek the financing from the KCB as reimbursement is awaited from the government.

The impact has been total disaster. The fertiliser subsidy programme has left the NCPB carrying huge sticky debts in its books.

The last time I checked, the figure of debts owed to NCPB by the government in the fertiliser subsidy programme had by September this year accumulated to Sh5.5 billion.

Debts owed to the fertiliser contractor, the entity known as Export Trading Ltd, were at Sh691 million.

POOR QUALITY

The investigation will only get to the bottom of the maize scandal if it targets the nexus of powerful politicians, millers, and international trading firms that has maintained a stranglehold over the grain marketing sector for donkey years.

My parting shot is that I am very sceptical about the loud campaign around allegations and reports of maize unfit for human consumption in NCPB stores.

Do not be surprised to hear that powerful millers have negotiated with Kilimo House to have the so-called poor quality maize sold to them at Sh1,600 per bag. We may be on the brink of another maize scandal.


Maize and sugar sector woes: Here is the real way forward

By ROBERT SHAW
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Two large grey clouds loom over our vital maize and sugar sub-sectors. Both have perennial strategic deficits so that only in a good year are we self-sufficient in maize production and sugar demand has long outstripped production.

Both are dogged by serious management and corruption such as the NCPB in maize and the old debt-laden largely government-owned sugar firms. The former is a relic of the colonial era and subject to political interference. The latter can be equated more with dinosaurs than modern commercial enterprises.

The cost of production in both is far higher than in many places, hence the attractiveness of cheaper maize imports from Uganda and Tanzania. For a long time Kenya has been producing some of the most expensive sugar in the world.

STAPLE FOOD

As well as maize being the country’s staple food, the two sub-sectors are major sources of employment and income for millions of Kenyans.

The NCPB has been in the news a lot recently and Agriculture Cabinet Secretary Mwangi Kiunjuri must feel he has been presented with a poisoned chalice.

The perennial problem with the NCPB is that it has plenty of maize in its stores at times of surplus and precious little that is edible in times of shortage.

Its strategic reserve capacity is 3 million 90-kilo bags. As consumption is in excess of 40 million bags a year, it is easy to see how such a small reserve runs out so quickly.

Even if farmers manage to sell their maize to NCPB, they wait months to be paid. Often brokers are given preference. One interesting recent scam involved brokers buying cheaper Ugandan maize and selling it to NCPB at a generous profit.

PRODUCTIVITY

The original largely state-owned sugar firms such as Nzoia, Muhoroni, Chemelil, Sony and also Mumias, are saddled with debt, ageing machinery and too many workers, culminating in pathetic productivity.

Farmers suffer delayed payments which in turn has made much of the sugar growing areas seas of poverty. Political interference leads to mismanagement, diversion of resources and stuffing factories with staff who got their jobs through connections rather than merit.

There is no magic wand, and trying to speed up delayed payments becomes a palliative rather than long term cure. The NCPB is unfit for the job: It does not have adequate funds to pay in time and lacks capacity to store surplus maize.

One solution could be to set up the framework for a ‘Warehouse Receipt System’. Farmers would deposit their maize with set-ups that have adequate storage. A receipt detailing the quantity, value and other specifications is given to the farmer, who can use it as collateral for loans.

BETTER PRICES

Another benefit is that the farmer can level out the supply chain, but release maize when there is less of a glut and prices are better. A third benefit is that stocks, particularly of smallholders, can be consolidated and sold jointly.

The Warehouse Receipt System Bill 2018 is undergoing its first reading before Parliament and will hopefully provide the relevant legal framework to fill this gap in marketing.

Addressing the ageing sugar factories will require a much more case-by-case approach. For example, if Nzoia or Sony have a lot of land, there is an option to diversify the product base into sugar-based products or alternative agricultural products.

FINANCIAL STAKE

Obviously the government must get out of the running of these factories and reduce its financial stake, but that does not mean selling off its assets to the highest bidder.

Another way could be for consortia to be put together with the relevant shareholding, which, in turn, will carry out that diversification.

An additional option is that some assets, land included, could be sold to raise money for the relevant diversification. In both cases the challenge for the government is to carry out long-term structural solutions, which will need considerable surgery.

Quick fixes like speeding up payments, alleviate the current plight but not much more.


Tricky times for African policy makers

By DINAH WAKIO
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There seems to be a leadership vacuum in the world right now, as partly seen in the lack of a consensus in the protectionism versus globalisation policy dilemma.

While prominent global leaders push the envelope with the trade wars, economists are predicting a potential financial crisis.

Notably, global growth has decelerated gradually compared with its strong historical performance. Some of the reasons given for this slowdown include the recent rise in protectionism, dimming of economic activity, increase in trade wars and tighter credit marked by high interest rates.

PROTECTIONISM

In recent times, protectionism has gained momentum with leaders seeking to protect their nations’ economic interests, mainly by creating trade barriers.

During the 2016 US election campaigns, most Republicans made remarks that showed their bias for protectionism.

Since his election as the 45th US President, Mr Donald Trump has constantly spoken about possible change of the existing foreign and trade policies, claiming they do not favour his country, claims most experts are sceptical about.

In a recent address to the UN General Assembly, Mr Trump noted that his nation was systematically renegotiating broken and bad trade deals.

REFERENDUM

In 2016, United Kingdom held a referendum and British voters opted out of the European Union. The scheduled exit March 29, next year, might, however, be halted following calls for a second referendum to remain in the EU. Those rethinking Brexit apparently realise that the UK stands to lose economically by going it alone.

In the face of a changing global trade environment, African leaders should step up decision making to secure their economies.

A World Bank report released early this year noted that 18 sub-Saharan African nations are at growing risk of debt distress because of heavy borrowing and gaping deficits. They include Angola, Ethiopia, Kenya, Ghana, Nigeria, Tanzania and Zambia.

DEVELOPMENT PROJECTS

While some argue that the loans are meant for the much-needed development projects, the sceptics are jittery about the consequences in the event of default.

In March, the African Continental Free Trade Area (AfCFTA), a regional body urged African states to join forces and promote the free movement of goods and services.

If all the 55 countries join, it will be one of the world’s largest free-trade areas with $4 trillion in combined consumer and business spending.

African policymakers must prudently craft policies geared towards unlocking their nations’ economic potential, while ensuring selfish interests do not hinder the opportunity for growth.

If this does not happen, Africa will continue to be on the edge as major global powers engage in healthy policy debates and impose their ways on us with our leadership failing to develop clear strategies to uplift our people.


CSs now risk sanctions for defying summons

By DAVID MWERE
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Cabinet Secretaries who fail to honour parliamentary committee summonses now risk sanctions.

One of the actions the MPs will now take is recommending the removal from Cabinet any CS who defies summonses as the legislators seek to assert their oversight role over the other arms of the government.

FLEX MUSCLES

National Assembly Speaker Justin Muturi read the riot act to CSs following complaints from House committee chairmen that this defiance has made it hard for them to conclude petitions or have members’ questions responded to.

Mr Muturi told the committees to stop “pampering” the rogue CSs and notify his office through reports of the cases, so that he can take action. “We need to see committee chairmen begin to flex muscles but within the law,” he said.

INVITATIONS

The Speaker said he is in receipt of a letter from Labour and Social Welfare Committee Chairman Ali Wario about a CS who has failed to honour the team’s numerous invitations. The committee oversees the Labour ministry that is under CS Ukur Yattani.

The Sports committee has also had a difficulties having Sports CS Rashid Echesa appear before it with Sicily Kariuki (Health), Amina Mohamed (Education) also mentioned among those failing to honour invitations without valid reasons.

COMMITTEES

“You should be the one deciding when the CSs should come and ensure they produce answers as per the questions asked and issues raised in form of petitions,” said Mr Muturi.

According to the House standing orders, committees are required to conclude petitions within 60 days upon their reading in the House by the Speaker. However, this does not happen as CSs fail to show up.

This prompted Lugari MP Ayub Savula to suggest amendments to the standing orders so that the CSs appear in the House to respond to the issues raised.

“We should bring CSs to the dispatch boxes. They don’t take Parliament business seriously,” he said.


It’s wrong approach to gender challenge

By EDITORIAL
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The Leader of the Majority in the National Assembly, Mr Aden Duale, is taking a wrong approach in tackling the gender inequality in the House. His proposal to amend the Constitution to increase the number of nominated women MPs in the National Assembly and the Senate to achieve the gender rule, though well-intended, is inappropriate.

In the proposal contained in the Constitution of Kenya (Amendment) Bill, Mr Duale seeks to raise the number of women in the National Assembly by 42, and in effect push the total number of MPs to 391, up from the current 349. Similarly, the number of Senators will rise, albeit marginally by four, to reach 71.

That Parliament has powers to change the law is not in contest. But there are two fundamental issues to confront.

AMEND CONSTITUTION

First, changing that law on the composition of Parliament requires enacting an Act of Parliament in line with Article 260 of the Constitution, which is a technical point in law. That is different with what Mr Duale proposes, namely to amend sections of the Constitution — that is the wrong approach.

Second, the change will create a logistical challenge in several respects. First, it will require the law to be changed after every election to get the right gender mix.

Yet law must be predictable. It is difficult to predict how many women will get elected at any electoral cycle. Ours is an electoral process that is fiercely competitive and incredibly unfair to women.

The third challenge is funds. Already, Kenyans are distressed over the huge public budget resulting from exceedingly large numbers of representatives.

GENDER RULE

Indeed, one of the repeated calls in regard to referendum on the Constitution is to reduce the level of representation, which is unwieldy. So proposing to add another layer of legislators is unacceptable.

There is process for securing the gender rule within the existing constitutional provisions. And the starting point is the party nominations, where deliberate measures should be taken to secure more for women.

Unfortunately, parties are not alive to this and expect women to campaign and win in the primaries in an environment that is extremely hostile, brutal and expensive.

GENDER PARITY

In effect, the spirit of the law on gender parity is not predicated on post-election nominations per se, but a combination of strategies that start early and at the grassroots.

As currently crafted, the proposed constitutional amendment is untenable and Mr Duale should consult widely and come up with a more practical proposition that creates predictability and consistency in arriving at the composition of the House.


Housing challenge timely

By EDITORIAL
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The African Union’s new infrastructure envoy, Mr Raila Odinga, has hit the ground running, challenging investors to stop concentrating housing projects in the cities and instead shift attention to satellite towns.

This, Mr Odinga says, will ease congestion and demographic pressures that have made life unbearable for city populations, more so the low income earners.

In Kenya, as in many other African states, the congestion is so endemic. Thanks mainly to poor planning and unchecked population growth, the urban centres are literally bursting at the seams, as they struggle to accommodate populations that by far outstrip their capacity.

Though they consider themselves city dwellers, they hardly get any services deserving of that status.

POOR SANITATION

Many can only afford to live in slums, where poor sanitation and lack of social amenities confine them to life in unhygienic conditions that expose them to infections and other health complications.

Having these decent and affordable housing outside the big cities would go a long way in making life better for both the city dwellers and residents of the satellite towns themselves. With reliable transport, more of these people can live away from the cities and commute to work daily without any inconvenience at all.

SATELLITE TOWNS

This has worked well for the developed nations where mass public transport systems ensure that populations in their millions commute effortlessly over long distance to and from work.

But even as the focus shifts to the satellite towns, emphasis must be placed on proper planning in terms of good roads, infrastructure, sanitation and social amenities.

Only this way would we ensure the satellite towns themselves do not go down the same chaotic path as the cities.


How to speed up the wheels of justice

By JOHN MUTHURI
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Now than ever before, many Kenyans are showing interest in the justice system and the rule of law. The high-profile murder cases, corruption trials, extra-judicial killings and the referendum discussion have got Kenyans from all walks of life commentating on the justice system.

REAWAKENED

The zeal with which Director of Public Prosecution (DPP) Noordin Haji has been working with Director of Criminal Investigation (DCI) George Kinoti to speed up the investigations has reawakened the lost hope in our justice system.

The media have also been keen to ensure that the citizens are well-informed about what is happening in or outside courts. The media have provided live coverage of cases and expert legal analysis to give more insight into the cases. After what can referred to as a good job by the DPP and DCI, Kenyans’ eyes are now on the courts.

They are waiting to see the day when graft cases will be tried and to completion. They are looking forward to the day when the Asset Recovery Commission will report about significant recovery of assets acquired through corruption. That is probably the day when Kenyans will begin to respect the apparatus fighting corruption. Anything less than a conviction and/or asset recovery is just entertainment to them.

HIGH-PROFILE

The people want to see speedy conclusion of the high-profile murder cases and those convicted punished for their wrongs. This will build trust in our courts. Families of victims of extra-judicial killings, too, want to see justice served and those culpable facing the legal consequences.

CONCLUSIONS

What most Kenyans do not know is that it takes an average of two-and-a- half years for a case to be concluded. This means, if not granted bail and/or unable to fulfil bail and bond terms, an accused person is likely to spend that long in remand. In some instances, accused persons spend more than six years in remand awaiting the conclusion of their trials. Are Kenyans ready to wait this long for justice to be served? Your guess is as good as mine!

According to the Judicial Annual Review, 2017, there was a backlog of 315,378 in 2016/17. There are some valid reasons for this. The major one is the shortage of staff. There are, for instance, only 459 magistrates against the required number of 687.

So what can be done? To speed up trials, Active Case Management should be embraced. This can simply be defined as a concept that the court schedules the proceedings in any matter. The court has a wide range of powers in regard to Active Case Management and the directions given by the court after the issue of proceedings should provide a framework and a schedule for dealing with a case. The proceedings could include the filling of the case, a response and the pre-trial conferences. Active Case Management in Kenya is anchored on Kenya Gazette notice No. 1340. They provide guidelines for a judge/magistrate on the scheduling for the submission or completion of the relevant pleadings, court appearances, and other matters.

MISMANAGEMENT

Each stage has a timeframe in which it must be filed with the court or completed. These guidelines should be replicated in the anti-corruption and murder cases and implemented fully.

However, what often happens in our system is “inactive case mismanagement”. A case is filed and nothing moves forth. The next dates are set without clearly examining the consecutive trial proceedings and dates. Our courts are also a victim of unnecessary adjournments by the parties.

UNPREPAREDNESS

A survey conducted by the Judiciary in 2014 found that the parties’ unpreparedness accounts for 44.78 percent of case delays and the courts not being in session. Delays in court cases are occasioned by missing investigating officers, unprepared prosecutors, absconding witnesses and unnecessary adjournment requests by the defence. The probation officers have been cited as the leading reason for delays in court processes, accounting to 18.34 percent of the case backlogs.

There is usually a pass of baton amongst the court officials calling for an adjournment in a matter. There are a few times that I have seen parties being put on the spot by a judge/magistrates to explain their grounds for seeking adjournments but many are the times the bench allows this on frivolous grounds.

PROPORTIONATE

Active Case Management ensures that all the matters in court are dealt with justly, expeditiously and at a proportionate cost. We all agree that justice delayed is justice denied. And until we embrace the Active Case Management where we can ascertain the possible time for case closure, then we should brace ourselves for more feet dragging, delays and frustrations in the courts.


Matatu madness traced to Jomo era

By JACQUELINE KUBANIA
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Uhuru Kenyatta is not the first Kenyan President to try to tame madness in the matatu sector.

Mwai Kibaki did in 2003, with the famous “Michuki Rules”, and before him, Daniel Moi also tried 30 years ago when he ordered all matatus off the road and all drivers retested following accidents that had left hundreds dead and many injured.

According to an archival article published in the New York Times on April 24, 1988, Moi’s efforts seem to have gone the way of his successors.

Enraged matatu operators went on a strike to protest the tough laws and, as a result, businesses were crippled, causing massive losses to traders. The government had no choice but to rescind its orders and allow unroadworthy vehicles and their rogue drivers back on the road.

FRANCHISED

Even then, the matatu industry proved too headstrong for government control.

Public transport in Nairobi dates back to 1934 when the Nairobi Town Bus was inaugurated with only two buses serving the city. Later, the Kenya Bus Services was franchised to carry the first fare-paying passengers, who were Europeans, Asians and very few Africans.

RURAL POOR

Researchers say matatus became part of the public transport in the 1950s, primarily emerging as a way to move people and goods from the rural areas to Nairobi.

“After independence in 1963, colonial restrictions about living in Nairobi were lifted. The rural poor, seeking cash wages, moved to Kenya’s capital in large numbers. The matatus, then essentially dilapidated pirate taxis that were often pursued by the police, arrived to fill this need,” writes Prof Kenda Mutongi, an history lecturer in the US, in a journal titled Thugs or Entrepreneurs? Perceptions of Matatu Operators in Nairobi, 1970 to the Present published in the Cambridge University Press.

ACCOUNTABILITY

First President Jomo Kenyatta issued a decree recognising matatus as a legal mode of transport, while at the same time freeing them from any regulation that would have been needed to enact government legislation and accountability over their operations.

The thinking then was that matatus were a force for good and their unhindered movement was seen as a reward to enterprising owners who had taken it upon themselves to ensure that the country kept moving.

This is the perception that prevails to date, and which has seen successive governments try to fill the legal lacuna left by first President Kenyatta in a bid to bring matatus under government control.